Employer Contribution of EIS in Malaysia

The Employment Insurance System (EIS), governed under the Employment Insurance System Act 2017 and administered by SOCSO, was introduced in Malaysia in 2018 to provide financial protection to employees who face job loss or retrenchment. It offers temporary financial assistance to eligible employees while they seek reemployment. The EIS aims to reduce the financial burden of unemployment and assist individuals in transitioning to new job opportunities seamlessly.

Also read: Employer contribution of SOCSO in Malaysia

Employers resposibilities in EIS

Employers are responsible for contributing to the EIS fund managed by the Social Security Organization (SOCSO). These contributions are crucial to maintaining the system and guaranteeing enough funds for needy employees. Employers must register their employees as SOCSO members just once, and they will automatically become eligible for EIS.

*The contribution rates in this table only apply to new employees aged 57 and above with prior contributions.

Kindly note that when making contributions to the Employment Insurance System, please calculate the amount based on the contribution rate specified in the Second Schedule of the 2017 Act. It is important to note that the monthly contribution is limited to a maximum salary of RM4,000. Please do not use the exact percentage calculation.

Also read: Employer contribution of EPF in Malaysia

Who is Eligible for EIS Benefits?

1. Contributions: An employee must have contributed a minimum amount to the EIS fund. Both employees and employers make contributions, and eligibility is based on these contributions.
2. Active Employment: Employees must be actively employed when applying for EIS benefits. The system is meant to assist those who lose jobs due to uncontrollable circumstances, like business closure or retrenchment.
3. Registration: Employees must register with the EIS within a specific timeframe after being hired to ensure coverage by the system.

When to make EIS payments?

Both employees and employers pay for the Employees' Insurance Scheme (EIS) at the same time as their Social Security Organization (SOCSO) contribution.

How to make EIS payments?

1. Calculate the Contribution: Employers determine the EIS contribution for each eligible employee by calculating a fixed percentage of their monthly salary.
2. Deduction and Payment: The employer is responsible for accurately deducting the calculated contribution from the employee's salary.
3. Submission: Employers must submit employer and employee contributions to relevant authorities, typically through the same channel as SOCSO.

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